McDonald's serves up Roadchef agreement

McDonald's will this week unveil an agreement with the motorway services operator RoadChef that heralds a new type of franchising model for the fast-food giant in Britain.

RoadChef, which has 29 sites at motorway service areas and major trunk roads across the country, will open and run a McDonald's restaurant in July at the Strensham Services station in Worcestershire. Currently, McDonald's has just four outlets at motorway service stations and all are operated as individual concerns.

Should the model at Strensham prove successful, it could lead to agreements with other motorway service companies and the opening of more than 100 franchise outlets run by operators within the next 10 years, say people close to McDonald's.

Steve Easterbrook, McDonald's UK chief executive, said the deal would also "deliver significant financial benefits to our system through enhanced economies of scale on areas like supply chain, particularly at a time like this of significant cost inflation".

McDonald's has revamped its menu over the past couple of years in an effort to keep up with the increasing popularity of healthy eating.

The fast-food chain, which opened its first UK outlet in 1974, last month suffered its first drop in like-for-like sales in the US for five years as hard-pressed US consumers cut back their spending.

Europe, including the UK, generated 42 per cent of the chain's sales in the first quarter and almost 40 per cent of its operating profit.

The group now expects sales in Europe to climb between 5.5 per cent and 6.5 per cent this year, with Asia, the Middle East and Africa rising as much as 7.5pc.

With its domestic US market slowing, McDonald's is also accelerating its expansion plans overseas.

Unveiling a 24 per cent rise in first-quarter profits to $946m (£477m) last week, the company said it plans to invest $2bn this year and open 1,000 new outlets in countries including China and Russia.

Shares in McDonald's have climbed more than 30 per cent since the start of 2007.

Easterbrook said: "Our business has been performing well over the last couple of years as customers have responded positively to the changes that we've been making to the menu."

RoadChef, which was acquired last year by Israeli group Delek for £375m, attracts about 65million motorists a year.